May 5 (Reuters) - London copper and other industrial metals rose on Thursday after the U.S. Federal Reserve raised interest rates as expected and tempered market expectations for an aggressive tightening path, which dented the dollar and lifted investor sentiment.

Benchmark three-month copper on the London Metal Exchange (LME) was up 2.6% at $9,723 a tonne, as of 0446 GMT.

LME aluminium gained 0.3% to $3,020.50 a tonne, zinc climbed 1.9% to $4,042, lead rose 1.4% to $2,313.50 and tin added 0.2% to $40,705.

The most-active June copper contract on the Shanghai Futures Exchange ending morning trading down 0.3% at 73,150 yuan ($11,077.46) as Chinese markets reopened after a long holiday weekend.

"The market is exuberant after the Fed raised rates by the expected 50 basis points than by 75 basis points that was feared," a metals trader in Singapore said.

"Risky assets such as equities rose during US hours, and base metals are catching up to that. Similarly, the USD fell, supporting commodities across the board."

The U.S. central bank raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, to fight against soaring inflation.

Fed Chairman Jerome Powell, however, sounded a less-hawkish tone than some had feared and said the U.S. central bank was not "actively considering" a 75 basis-point rate hike.

Asian shares tracked Wall Street's gains on Thursday, while the dollar fell to a one-week low against its rivals, making greenback-denominated metals less expensive for buyers using other currencies.

* China's services sector activity contracted at the second-steepest rate on record in April, as COVID-19 curbs halted the industry, a private-sector survey showed.

* The LME said it had stopped allowing Russian-produced lead into its warehouses following European Union sanctions on the country's products.

* Rio Tinto said any sanctions on Russian aluminium producer Rusal for Moscow's invasion of Ukraine would significantly disrupt the aluminium market and drive prices up.

* Global copper and nickel smelting activity rose in April even as COVID-19 lockdowns intensified in top producer China, data from satellite surveillance of metal processing plants showed on Wednesday.

* PRICES: Shanghai aluminium eased 0.1%, zinc was down 0.7% and nickel fell 3%, while lead added 1.4% and tin gained 0.2%.

($1 = 6.6035 Chinese yuan) (Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)